Indesign won't support XML tags in auto footnote stream.
You need to change all the footnote XML "<" ">" to a sequence name.
eg. <footnote> ---> *&*ang*&*footnote*&*angc*&*
The angle should be changed before importing it into indesign.
Then using script you can convert all the footnotes to auto footnotes and finally change *&* to angle.
Lots of base work involved for XML footnote automation.
1. XSLT to move all the footnotes to respective places
2. Scripts to convert all the footnotes to autofootnotes
1. Script to revert footnote to respective places
2. Pearl to convert the footnote as per DTD
I've been looking around and found the ReFoot script which is a good starting point. The patterns need to be rewritten if you have tags inside your footnote tags (which I do) - but that's not a problem. I've found no way to get it to work with tags in inDesign though so the method you mentioned of changing "<" and "<" to another sequence is still my best option.